DETROIT (Reuters) - Detroit's auto industry, which has
given the world the "muscle car" and "gas guzzler," may finally
be seeing "green."

Top auto executives, investors and industry analysts sang
the same tune at this week's Reuters Auto Summit: newfound hope
for competing in the market for fuel-efficient, environmentally
friendly cars and trucks.

Green, it seems, is good.

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"It's going to be treated as if it were science fact, and
it's clear there will be lots of pressure and lots of
encouragement toward green activity," said Ross, who has bought
several big auto supply companies in recent years.

General Motors Corp, at risk of being displaced by Toyota
Motor Corp as the world's top seller of vehicles, has earned
much scorn -- and suffered a steady erosion of its
once-dominant market share -- due to gas-guzzling creations
like the Hummer, jumbo sport utility vehicles and giant trucks.

"We somehow ... let Toyota get ahead of us in terms of
environmental technology because they did the Prius hybrid, and
we elected not to do that kind of hybrid," GM's vice chairman
and product development chief Robert Lutz told the Reuters
Summit.

"We have since realized that letting Toyota gain that
mantle of green respectability and technology leadership has
really cost us dearly in the marketplace."

Lutz, a 40-year veteran of Detroit and an outspoken
champion of American technology, bristled at the thought. He
said GM will introduce 12 new hybrids over the next 3 years.

"It has gotten to the point where people buy Toyota because
it is seen as the sane and responsible thing to do because,
after all, Toyota is the company that brought you the Prius."

GM plans to launch its mass-market, plug-in electric car,
the Chevrolet Volt, by the end of 2010, despite skepticism
within GM about meeting that deadline. Revolutionary lithium
ion battery technology is only one daunting challenge.

"People are biting their nails, but those of us in a
leadership position have said it has to be done," said Lutz.

"We have to re-establish GM's leadership, and the Volt is,
frankly, an effort to leapfrog anything that is done by any
other competitor," Lutz said.

If federal regulators will count the Volt's 40-mile
battery-only range in calculating its fuel-efficiency, Lutz
said the car would achieve "off-the-chart fuel economy ratings"
that could be "way over 100 miles-per-gallon."

That, in turn, could help GM meet tough new fleetwide fuel
economy ratings expected to clear Congress, he said. The Volt
could represent "the only financially feasible way to achieve
these numbers that Congress is talking about," he said.

GM is the only automaker to have provided a timeline on
such a car, even though other companies, such as Ford Motor Co
and Toyota, are working on similar technology.

Ford global product chief Derrick Kuzak said that "green
issues," led by fuel economy, were No. 1 on his to-do list.

"It's at the top of our customers' list, given the price of
oil, the price of gasoline and the increasing environmental
sensitivity," Kuzak said.

But Ford, which lost $12.6 billion in 2006, has no plans
for a new iconic vehicle like the Volt. Kuzak said Ford's focus
is on new direct-inject gasoline turbo technology, based on
diesel engines, that offered up to 25 percent gains in fuel
economy.

Stefan Jacoby, chief executive of Volkswagen AG's U.S.
operations, agreed that you can have "much bigger efforts by
doing things simple: smaller cars, right away, and of course
new engine generations," he said. "Do the first things first."

That includes plans to boost VW's popular Jetta diesel.

"It's a very easy way to save fuel and do something for the
environment," he said. "American consumers are as
environmentally concerned as everybody else in the world. But
they really did not get the right offers."

Parts suppliers -- from tiremakers to makers of lightweight
alloys to power train, battery and emissions makers -- have all
seen the green light at the end of Detroit's tunnel.

Gregg Sherrill, CEO of Tenneco Inc, a maker of emission
control devices, said issues of consumer confidence about
global warming were becoming "enormous."

"If you look at the concern over greenhouse gases, which is
primarily CO2, the only way to really address that is through
better fuel economy," he said, citing tougher regulations and
legal rulings now appearing regularly on emission controls.

"I have no idea what's coming, other than to say I don't
believe for one minute that in any country in the world there
is a lessening of environmental concern going on over the next
several years," Sherrill said.

(For summit blog: http://summitnotebook.reuters.com/)

(Additional reporting by Jui Chakravorty and David Bailey;
Editing by Jeffrey Benkoe)